US stocks moved higher on Wednesday after July’s Consumer Price Index report matched Wall Street expectations, giving investors just enough comfort to push equities up.
The S&P 500 climbed 0.3%, the Nasdaq Composite gained 0.7%, and the Dow Jones Industrial Average traded roughly flat, dipping slightly to around 53,758.
July CPI showed inflation cooling to a 3.4% annual rate, down from June’s 3.5%. On a monthly basis, prices rose 0.1%.
“Not too hot, but also not too cold,” wrote Rosenberg Research’s David Rosenberg. He called it a neutral report for the bond market, adding there was no smoking gun for the Fed heading into September.
Traders shifted their positioning after the data. What had been a roughly 50-50 split on whether the Fed would hold or hike rates in September tilted toward a hold following the print.
Inflation staying above the Fed’s 2% target means central bankers are not out of the woods yet. The September meeting remains live, even if the base case now leans toward a pause.
BREAKING: July CPI inflation falls to 3.4%, in-line with expectations of 3.4%
Core CPI inflation falls to 2.5%, also in-line with expectations of 2.5%.
Month-over-month CPI inflation rose +0.1%, up from -0.4% in June.
US stock market futures are rising on the news.
— The Kobeissi Letter (@KobeissiLetter) August 12, 2026
The 2-year Treasury yield fell to 4.18% and the 10-year dropped to 4.66% following the CPI release, reflecting easing rate hike fears.
Tech and AI-related stocks were the session’s standout winners, lifted by a wave of strong earnings reports. Software stocks were the exception, struggling to keep pace with the broader market rally.
Brent crude futures pushed close to $90 per barrel after the US fired on a Panama-flagged ship attempting to cross the Gulf of Oman on Tuesday.
The US and Iran remain deadlocked in negotiations over reopening the Strait of Hormuz, keeping energy markets on edge and adding upward pressure on prices broadly.
That backdrop continues to complicate the Fed’s job, as elevated oil prices feed through to consumer costs.
On the earnings front, Cisco Systems (CSCO), Coherent Corp. (COHR), and Cerebras Systems (CBRS) are among the companies reporting results this week.
The Nasdaq opened Wednesday up 0.9% before settling to a 0.7% gain by afternoon trading, while the S&P 500 held steady around 7,741.
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